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Chapter 9: The Role and Control of Multinational Corporations in the World Economy
9 The role and control of multinational corporations in the world economy Gerald Epstein* 1 Introduction Multinational corporations (MNCs) have become an increasingly important force in the dynamics of the global economy. For example, according to the United Nations, during the last 20 years, the gross product of the foreign afliates of multinational corporations increased faster than global GDP while foreign afliate sales increased faster than global exports. Taking into account both their international and national production, the United Nations Conference on Trade and Development (UNCTAD) estimates that multinational corporations produced about 10 per cent of the world’s GDP in 1999 (UNCTAD, World Investment Report, 2000, p. xv).1 As one might expect, the impact of MNCs on developing and developed countries is hotly debated. At one extreme are the MNC boosters who argue that MNCs provide stable capital inows, jobs, technology transfer and investment to ‘host countries’, while increasing growth and employment in the ‘home’ countries (Moran, 1998, 2002). On the other hand, critics contend that international capital mobility in general and MNCs in particular are creating a ‘race to the bottom’ around the globe, enhancing prots and political power for multinational corporations and local elites who benet from their presence, while eroding wages, tax bases, social protections and the environment. Importantly, different views on the impacts of MNCs not only characterise a divide between pro-labour forces on the one hand, and business boosters on the other; they also divide critics of globalisation, often along the lines of those...
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